PAR Says Delay Session

November 30, 2006

Calling a special legislative session immediately after additional and surplus revenues are officially recognized next week is a bad idea. There is no compelling reason to hastily spend the nearly $2 billion expected to be estimated – except to generate political support with promises of pay raises, rebate checks and tax cuts. The governor should retreat from plans to call a special session beginning December 8, and revert to her earlier strategy of calling one no sooner than January.

However, there may be no need for a special session at all. The adoption of well-developed spending plans can probably wait until the regular session begins in April. That would give the governor and legislature sufficient time to plan the best course of action and the public ample opportunity to participate in the debate. An immediate special session can only serve to generate short-sighted expenditures like insurance rebate checks to coincide with the arrival of holiday bills.

Another check-writing debacle would only distract from the very tangible, very urgent and very expensive needs facing the state. A studied approach to spending the two pots of extra cash would include substantial payments on the state’s retirement debt, massive investment in roads and highways and possible seed funding for the variety of plans on the drawing table for an insurance industry rescue, coastal restoration, health care reform and infrastructure rebuilding for state and local governments.

The Revenue Estimating Conference is expected to certify an $827 million surplus from the FY 06 budget. Those funds are limited to use for constitutionally established, non-recurring expenses. But, a substantial portion of an additional $800 million or more in the current-year budget is likely to be determined to be recurring. While this determination would allow expenditure for ongoing operational expenses like pay raises for public employees, growing the state budget now is premature.

Raising teacher and police officer pay should certainly be among the considerations by the governor and legislature for how to spend the additional money. But, quickly settling on those and other very popular uses of the funds would ignore the range of options that could serve to stop the exodus of residents and citizens leaving Louisiana. The best options may not even have been conceived yet. This precarious position of simultaneously being disaster-stricken and awash in cash calls for innovative policymaking. Dusting off shelved wish lists is short sighted.

This boom-time revenue should be spent only to advance the long-term prospects for an improved quality of living in Louisiana. The debate should be clear and extended. That cannot be accomplished in time for a December 8 session.